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Roku Open to a Blu-ray Drive


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By : Erik Gruenwedel | Posted: 22 Jan 2010


Roku, the media player manufacturer synonymous with Netflix’s inaugural movie streaming efforts in 2008, would consider incorporating a Blu-ray drive if the economics made sense (which don’t right now), according to founder and CEO Anthony Wood.

For a company that helped move movie streaming beyond the PC and into the living room television, considering packaged media might seem almost sacrilegious. Then again, Wood, who founded ReplayTV and was once an executive with Netflix, realizes DVD and Blu-ray are well-entrenched distribution channels.

“We have no plans to do it, but we are not opposed to it necessarily,” Wood said.

A major stumbling block, of course, are the costs involved incorporating a BD drive and related large-scale integrated (LSI) chip technology that would easily double the price of Roku’s players, which start at $79 for a standard-definition unit.
Roku, which markets directly to consumers, also sells a high-definition player for $99 and wireless HD device for $129. Many Blu-ray players with Internet connectivity now retail around $150.

“I’m a little surprised to hear they are not opposed to Blu-ray,” said Andy Parsons, spokesperson for the Blu-ray Disc Association and senior executive with Pioneer Electronics. “Adding [BD functionality] to Roku would be good for the Blu-ray format, and good for consumers that want flexibility between physical and digital. Then again, now it’s just another Blu-ray player with Netflix streaming.”

Since the Saratoga, Calif.-based company makes a significant percentage of its margin on hardware sales, its business model doesn’t allow it to sell devices as loss leaders, as many of the Blu-ray players on the market are, according to Wood.
“A Best Buy can sell a Blu-ray player below cost, because they then sell you a $30 HDMI cable and a couple of movies,” he said.

The CEO said Roku is increasingly growing incremental revenue beyond Netflix from a Roku Channel Store, which includes premium programming such as MLB.TV, Amazon VOD, Pandora music downloads and last winter, EroticVision.TV,
Wood said he considers Blu-ray a temporary format that will phase out as digital distribution evolves.

Parsons, of course, disagreed, saying Blu-ray and digital distribution will continue to prosper jointly for some time, catering to symbiotic usage models among consumers just as movie rental and sellthrough co-exist.

“If it was a situation pitting one format against the other, do you think having a Blu-ray player with Netflix would ever have seen the light of day?” he said.


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Six Questions: Roku’s Anthony Wood

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User comments

Commented by Robert Smith
Posted on 2010-01-24 18:48:46

It is hard to see the Roku player as being a good bargain for $99 (HD version) when you can get a Blu-ray player with the same streaming features for under $150. As streaming becomes a standard feature on Blu-ray players this next year, Roku must choose between adding Blu-ray or dropping the product line altogether. There is still room for a universal streaming Blu-ray player that will stream from any web site without the current licensing mess. This would be a good product for Roku.





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